SR-901-000-02
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:'uG 2 2 1985
Santa Monica, California
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City council Meeting 08/22/89
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TO:
Mayor and City Council
FROM:
city staff
SUBJECT:
Recommendations to authorize city Manager to
execute a loan agreement with the Los Angeles
County Transportation Commission and to execute a
purchase agreement with the Southern Pacific
Transportation Company for the Bergamot property.
Introduction
This report outlines steps which the City needs to take in order
to support the preservation of the Santa Monica Branch Line
railroad right-of-way for public uses.
Background
The Southern Pacific Transportation Company (SPTCo) has announced
its intention to abandon the santa Monica Branch Line
right-of-way and has offered to sell it and other surplus rail
lines to the Los Angeles County Transportation Commission (LACTC)
for future development of public transportation systems. City
staff has been working closely with Commission staff in order to
ensure the preservation of this irreplacable resource for future
public use. In examining the various rights-of-way for public
transportation use, the Commission has sought to identify
adjacent large parcels which would be necessary for stations and
support facility locations. One such parcel is the Bergamot
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AUG 2 2 1989
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property in Santa Monica. This 9.5 acre parcel is located along
the south side of the railroad right-of-way north of Michigan
Avenue, between 26th street and stewart Avenue. Its shape and
overall size make it an good location for a rail car storage and
light maintenance yard.
As noted above, SPTCo has offered to sell several of its railroad
rights-of-way to LACTC. They are also anxious to dispose of
other real estate they hold, and have put up a number of parcels
for bid by interested parties. They received several bids on the
Bergamot property, the highest being $ 17,250,000. Commission
staff has confidentially examined the bids received by the
railroad on several properties, including Bergamot, and has
determined that SPTCo has received bona fide offers.
The offer on the Bergamot property expires on August 23, 1989 and
the bidder has refused to extend it. The Commission is unable to
move that quickly, and has asked the City of Santa Monica to
purchase this valuable property and hold it on their behalf.
They have offered to loan the City forty percent of the purchase
price, $ 6,900,000. The Commission is expected to act on the
loan at its meeting of August 23, 1989. The remainder,
$ 10,325,000, would come from the City's T.D.A. Rail Reserve
funds held by the County of Los Angeles. This reserve fund was
created through the efforts of the Santa Monica Municipal Bus
Lines. The Director of Transportation had the foresight to
recognize possible future needs such as this and created this
reserve through continuing operating economies. These funds are
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dedicated for public transportation use only. Thus any public
use of the property must only be for transit purposes. Since the
bidder on Bergamot has refused to extend their offer beyond
August 23rd, SPTCo has found it necessary to hold us to that same
deadline in order to be assured of a buyer for the property. A
Purchase Agreement is being prepared for execution on that date.
It sets forth a thirty day escrow period. city staff has
received copies of the Environmental Report on Bergamot which was
prepared by ENSR Consulting and Engineering Company for SPTCo.
We find no evidence of any toxic or hazardous materials which
would require any clean up effort after purchase of the property.
However, we will undertake and diligently pursue further
investigations during the escrow period.
Budgetary / Fiscal Impact
The recommended actions would result in $ 17,250,000 being
appropriated to Account No. 33-710-631-29390-8918-99224 for the
purchase of the Bergamot property from the Southern pacific
Transportation Company.
This appropriation would be financed by a loan in the amount of
$ 6,900,000 from the Los Angeles County Transportation
Commission, and by $ 10,350,000 from the city's T.D.A. Rail
Reserve.
The revenue from the existing leases will be deposited into
Reserve Account No. 41-000-000-00000-9800-04440 which is for
transit purposes only.
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Recommendations
1. Authorize the city Manager to execute the Purchase
Agreement with the southern Pacific Transportation
Company for the acquisition of the Bergamot property for
the amount of $ 17,250,000, conti~gent upon receipt of a
loan in the amount of $ 6,900,000 from the Los Angeles
County Transportation Commission.
2. Authorize the City Manager to execute a Loan Agreement
with the Los Angeles County Transportation Commission
for the amount of $ 6,900,000 to assist in the purchase
of the Bergamot property from the southern Pacific
Transportation Company.
3. Approve the revenue and expenditure budget adjustments
as set forth above.
4. Authorize the city Manager to take whatever additional
actions as may be required to accomplish the purchase
and loan as described above.
Prepared by: Hank Dittmar, Airport Director
Frank Barnes, Airport Superintendent
CC082289/fb
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